Brand Name and the Cost of Advertisement

BRAND NAME
Student:
Institution:
Introduction
In a competitive field where a company is successful in the market, it is worth considering to introduce a new product in the market. Introducing this new product might be done independently on its own or even by extending the new brand from the existing brand in the market. Introducing the new product on its own might be that risky as it might not be certain if the product will be the consumer’s preference. This is because introducing a new product is associated with high advertisement as it is new in the market and consumers need to be informed about the product. High advertisement cost may be a high threat if the product fails in the market thus it is wise to use the brand name of my successful product in the market. The following are some of the factors that I will consider when extending the brand of the product.
What factors should you consider before making this decision?
The cost of advertisement; since the product will be new in the market, it will require high levels of advertisement that is associated with high amount of cost. High advertising cost of the new product may be a high risk associated with the company, this is because the company might use a lot of funds in advertising the new product and on the other hand they might not receive a welcoming reception by the consumers in the market. The new product might also record low sales which might lead to loses in the market and this might be a drawback to the company...